Logan's leaders look to new menu rollout for sales bounce

With traffic still struggling, chain will be 'very cautious' on hiking prices

Published June 12, 2014 by
Geert De Lombaerde

Executives at Logan's Roadhouse will roll out a revamped menu across the company's footprint several months ahead of schedule as they seek to rebuild sales that have been slipping for more than three years.

The team led by Chairman, President and CEO Mike Andres also has brought back weekend happy hours and plan to boost Logan's to-go operations in a bid to stem losses that totaled $1.7 million[2] in the recently concluded third fiscal quarter and reached $23 million since last summer as same-store sales fell 4.5 percent from the year before.

The new Logan's menu, which includes more chicken dishes but still heavily features steaks, has been tested in the Nashville area and in northern Alabama, which are home to about 10 percent of the chain's 260 locations. Andres said the Logan's team has received "great feedback" from diners and seen its average check size grow steadily.

But Logan's leaders aren't expecting new menus to be an instant cure for its top-line struggles: Asked Thursday by an analyst to quantify the sales jump at the test locations, CFO Amy Bertauski declined to get that specific but added that she and Andres didn't want to suggest the restaurants were posting same-store sales gains. Based on their research, they think Logan's is taking market share from other concepts.

More broadly, Andres says he and his team are focused on positioning Logan's a viable low-price family dining option and have done away with deep discounting initiatives.

"We have markets doing very well and some that are struggling," Andres said. "Even when you get within markets, you have restaurants that are being affected by unique situations. I don't think it goes to the vitality of the brand but it speaks to those particular markets. The brand is doing very well."

Also on the Logan's call with analysts and investors, Bertauski said the company will not try to keep up with expected food inflation, which is expected to be in a range of 3 percent to 5 percent in the coming fiscal year. She said the Logan's executive team is aiming for price increases of 1 percent to 3 percent and is "going to be very cautious in our decisions as we go through the year" because the company's core customer is still very sensitive to price fluctuations.